Equities Surge as India–US Trade Deal Lifts Tariff Overhang

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

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By Dehuti Jani

February 3, 2026 at 11:38 AM IST

Indian equity benchmarks surged on Tuesday as bulls stormed Dalal Street following the finalisation of a landmark India–US trade deal, which sharply eased tariff-related concerns that have weighed on markets for months. The agreement, announced by US President Donald Trump, reduces reciprocal tariffs on Indian goods to 18% from 50% and has significantly improved investor sentiment, particularly around foreign capital flows and geopolitical positioning.

The BSE Sensex jumped 2.54% or 2,072.67 points to close at 83,739.13, while the NSE Nifty50 rallied 2.55% or 639.15 points to settle at 25,727.55, marking one of the strongest single-day gains in recent months. Buying was broad-based, with Adani Ports, Bajaj Finance, IndiGo and Power Grid among the top Sensex gainers. All sectoral indices ended firmly in the green, led by a sharp rally in Nifty Realty, which surged over 4%. Nifty Chemical, Pharma and Consumer Durables indices climbed more than 3% each, reflecting renewed risk appetite. Broader markets mirrored the optimism, with the Nifty MidCap 100 and Nifty SmallCap 100 advancing 2.84% and 2.82%, respectively.

Top Movers of the Day

Reliance Industries fell over 3% in intra-day trade as investors continued to digest muted Q3 earnings and remained cautious amid global trade uncertainty, making it one of the biggest drags on the benchmarks.

ICICI Bank slipped around 2% as banking stocks stayed under pressure following Budget-related concerns around borrowing and bond yields, despite otherwise stable fundamentals.

Bharat Electronics gained nearly 5% after strong buying interest in defence stocks, supported by expectations of sustained government capex and order inflows.

Larsen & Toubro rose about 3% as infrastructure and capital goods stocks rebounded, aided by optimism around continued public spending despite the large borrowing programme.

Adani Ports and SEZ advanced close to 4%, tracking a recovery in Adani Group stocks after recent sharp declines and supported by selective value buying.

Mahindra & Mahindra climbed around 3% on renewed interest in auto stocks, aided by expectations of steady rural demand and stable margins.

HDFC Bank edged higher by about 1–1.5% as late-session buying emerged in heavyweight private banks, helping the benchmarks recover from intraday lows.

Tata Steel declined over 2% amid weakness in metal stocks, as concerns over global growth and softer steel prices weighed on sentiment.

Infosys slipped around 1.5% as IT stocks remained under pressure, with investors cautious on discretionary spending trends and US tech demand.

NTPC gained nearly 2% as defensive PSU names attracted buying interest amid volatile broader market conditions.

Futures & Options
Nifty February 2026 futures ended at 25,823.10, a 95.55-point premium to the Nifty cash close of 25,727.55, which rose 639.15 points or 2.55%. India VIX dropped 6.99% to 12.90. HDFC Bank, Reliance Industries, and ICICI Bank were the most actively traded stock futures on NSE. February 2026 F&O contracts expire on 24 February 2026.

Bonds
Government bond rallied in early trade on Tuesday, supported by optimism around the India–US trade deal, which lifted hopes of a firmer rupee and potential foreign inflows into local debt markets. However, profit-taking capped gains as investors remained cautious about demand–supply dynamics and awaited the Reserve Bank of India’s policy decision later this week. The benchmark 10-year 6.48% 2035 bond yield eased to 6.7245%, from the previous close of 6.7662%, after having hit a more-than-one-year high a session earlier following the Union Budget’s record borrowing projections.

Forex
The rupee emerged as the best-performing Asian currency on Tuesday, surging 122 paise, or 1.36%, to close at 90.2659 per US dollar compared to previous close of 91.5125 after India and the US announced a landmark trade deal. Traders said the currency touched its strongest level in nearly two and a half weeks, with gains of around 1.5% on the day as improved trade prospects eased concerns over capital outflows and boosted sentiment toward Indian assets.

Crypto
Crypto markets attempted a recovery on Tuesday after a sharp sell-off in the previous session, with large investors stepping in to absorb panic-driven selling. Bitcoin rebounded to around $78,600 after plunging below $77,000 a day earlier, as buyers defended key technical support levels. Ethereum outperformed during the rebound, rising about 3.7% to $2,339, suggesting selective risk appetite returning to major tokens even as broader sentiment remains cautious.

US Stock Futures
US stock futures edged higher on Tuesday, extending the strong start to the month on Wall Street after a broad-based rally in the previous session. Futures on the S&P 500 rose 0.2%, while Nasdaq 100 futures gained about 0.5%, supported by continued strength in technology stocks. Dow Jones Industrial Average futures were little changed, following a sharp 500-point advance in the blue-chip index on Monday that led the broader market higher.

US Treasury Notes
US Treasury yields were largely steady on Tuesday as investors assessed the implications of the newly announced US–India trade agreement. The benchmark 10-year yield hovered around 4.28%, while the 2-year yield stayed near 3.58% and the 30-year yield around 4.91%, all little changed on the day. Market participants appeared to take the trade news in stride, with the agreement to immediately lower tariffs helping ease some growth concerns but not materially altering expectations for the Federal Reserve’s near-term policy path.

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